China’s attempts to open up its equity markets to foreign investors could be undermined by the country’s deteriorating standards of corporate governance.

In recent years Beijing has pushed for its $7.5tn mainland A-shares market to be incorporated into the widely followed MSCI Emerging Market index, which could open the door to hundreds of billions of dollars of foreign portfolio investment. Many commentators expect MSCI to grant approval next year after turning China down in June.

China has also started to open up its market through such measures as Shanghai-Hong Kong Stock Connect, a similar link for the Shenzhen market, due by the end of the year, and the Qualified Foreign Institutional Investor scheme, all of which allow foreign investors to buy into mainland Chinese stocks.